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Following the sell-off on September 7th, EOS attempted to reclaim some of its lost ground. However, a bearish pattern on its 4-hour charts was discovered, culminating in yet another breakdown. Before EOS can make another recovery effort, it is expected that the price will consolidate within a narrow channel in the near future.
If the bigger market sells off again, a few support lines can be activated. At the time of writing, EOS was trading at $4.62, down 3.7 percent in the previous 24 hours.
EOS 4-hour Chart
After EOS fell below its 20-SMA (red) due to a bear flag collapse, market momentum moved back to the selling. As buyers seek to re-energize momentum, the channel between $4.65 and 4.8 would be especially important. Furthermore, according to the Bollinger Bands, the market appeared to be getting less volatile, indicating a period of consolidation.
In the event of a southward push, support can be located at the swing low of $4.15 set on August 9th. Any additional drawdowns would result in severe bleeding. On the contrary, a push above the 20-day simple moving average (red) would be necessary to establish bullish control.
A close above 10 September’s swing high of $5.05 would be the best-case outcome and the move would also bring the 200-SMA (green) into play.
While EOS has produced two green candles in the last few days, the indicators have remained negative. The RSI was trading below 40, indicating that EOS would continue to be sensitive to losses until this measure rises over 50-55.
Meanwhile, the MACD rose somewhat from multi-month lows, although it remained considerably below the half-line. On the plus side, the signal and fast-moving lines were intermingled, implying that some market equilibrium was maintained.
Finally, the Aroon up crossed below the Aroon down, indicating that traders should abandon their positions as the possibility of further declines remains strong.
EOS is projected to settle between $4.65 and $4.8 in the near term as trade volumes and volatility decline. The market, though, appeared to be more vulnerable to losses than to a positive recovery.
In the event of further downturn, keep an eye on the critical support line of $5.05.